International investors still had stories to tell about how their businesses are hindered by Vietnam’s red tape at a business forum on Tuesday, while acknowledging the progress the country has made in simplifying its bureaucratic procedures.
All of the complaints by foreign investors about Vietnam’s excessive bureaucracy are “highly appreciated” by Prime Minister Nguyen Tan Dung, he said in a speech at the annual Vietnam Business Forum 2014 (VBF) in Hanoi.
The event, intended to improve the Vietnamese business environment through a structured dialogue between the government, local and foreign firms and the donor community, attracted nearly 500 investors, according to the Vietnam Business Forum Consortium, which co-hosted the event with the Ministry of Planning and Investment and the World Bank Group.
Gaurav Gupta, chairman of the American Chamber of Commerce in Vietnam, said the country is not the right place for companies that follow the law to pursue success.
Despite many positive legal changes, the Southeast Asian nation’s legal framework still hinders business activities, he said.
David Lim, head of the forum’s land sub-group, said investors have to spend as many as 160 days completing required procedures for their realty investment application, but still do not know whether they are allowed to implement the project.
His counterpart in the human resource sub-group, Colin Blackwell, said the problems with applying for a work permit for foreign employees was mentioned in the 2013 VBF, but no progress was made one year on.
It could take as many as four months for a foreigner to get a work permit, while some foreign experts only need the paper for a short business trip of a few days or weeks in the Southeast Asian country, Blackwell added.
Citing a recent survey, Blackwell said 65 percent of the respondents believed that it takes double the amount of time to get a work permit in Vietnam compared to other Asian markets.
Many South Korean businesses, meanwhile, are facing legal challenges in Vietnam, according to Kim Jung In, chairman of the Korea Chamber of Business in the Southeast Asian country.
Vietnam has stipulated that hi-tech businesses enjoy zero import duty for raw materials, but this rarely happens as its customs agencies refuse to follow the law thanks to the lack of guidelines, Kim said.
The Ministry of Science and Technology has issued a circular demanding that the quality of used machinery and equipment be 80 percent as good as new ones to be eligible for import into Vietnam.
The ministry has delayed the effective date of the new regulation after it generated negative feedback, but Kim said the circular must be voided in lieu of that simple delay.
Investors are still concerned about what will happen when it eventually takes effect, he added.
Lack of transparency
Vietnamese businesses too are facing difficulties on their home soil, according to Vu Tien Loc, who is chairman of the Vietnam Chamber of Commerce and Industry and co-chairman of the VBF Consortium.
“There is a lack of transparency when it comes to access to legal and planning documents from authorities,” Loc said.
Local enterprises also complained that the amendments to the current laws and regulations are “unpredictable.”
Vietnamese Minister of Planning and Investment Bui Quang Vinh said between 2011 and 2013, the VBF put on the table 170 issues, 107 of which have been resolved or are being solved.
More discussions are needed to work out solutions for the remaining 63 problems, Vinh said.
The propositions and petitions made during the VBF over the last few years have greatly contributed to the policy reforms and business environment improvement of Vietnam, Vinh added.
Prime Minister Dung underscored that the government will focus on improving the business environment and legal framework to create the most convenient possible conditions for businesses.
“I'd like to give a message that Vietnam wants to integrate deeply to grow faster and more sustainably, and to improve and perfect its constitution and law,” he said.